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Three years ago, when electric grid operators were starting to talk about the need to protect critical infrastructure from cyberattacks, few utilities had even hired a chief information security officer.

Gen. Michael Hayden, principal at security consultancy The Chertoff Group, was director of the National Security Agency, and then the CIA, during the years leading up to the event. "I have to be careful about this," he says, "but in a time of peace, someone deployed a cyberweapon to destroy what another nation would describe as its critical infrastructure." In taking this step, the perpetrator not only demonstrated that control systems are vulnerable, but also legitimized this kind of activity by a nation-state, he says.

The attack rattled the industry. "Stuxnet was a game-changer because it opened people's eyes to the fact that a cyber event can actually result in physical damage," says Mark Weatherford, deputy undersecretary for cybersecurity in the National Protection Programs Directorate at the U.S. Department of Homeland Security.

In another development that raised awareness of the threat of cyberwar, the U.S. government in October accused Iran of launching distributed denial-of-service (DDoS) attacks against U.S. financial institutions. In a speech intended to build support for stalled legislation known as the Cybersecurity Act that would enable greater information sharing and improved cybersecurity standards, Defense Secretary Leon Panetta warned that the nation faced the possibility of a "cyber Pearl Harbor" unless action was taken to better protect critical infrastructure.

On the other hand, cybersecurity is still not among the top five reliability concerns for most utilities, according to John Pescatore, an analyst at Gartner. Says Roxey: "It's clearly in the top 10." But then, so is vegetation management.

Compounding the challenge is the fact that regulated utilities tend to have tight budgets. That's a big problem, says Paul Kurtz, managing director of international practice at security engineering company CyberPoint International and former senior director for critical infrastructure protection at the White House's Homeland Security Council. "We're not offering cost-effective, measurable solutions," he says. "How do you do this without hemorrhaging cash?"

Cyberdefense Strategies

Should the U.S. Strike Back?

Most best practices on dealing with cyberattacks on critical infrastructure focus on defense: patching vulnerabilities and managing risk. But should the U.S. conduct preemptive strikes against suspected attackers -- or at least hit back?

Gen. Michael Hayden, principal at security consultancy The Chertoff Group, and former director of the NSA and the CIA, says the cybersecurity problem can be understood through the classic risk equation: Risk (R) = threat (T) x vulnerability (V) x consequences (C). "If I can drive any factor down to zero, the risk goes down to zero," he says. So far, most efforts have focused on reducing V, and there's been a shift toward C, with the goal of determining how to rapidly detect an attack, contain the damage and stay online. "But we are only now beginning to wonder, how do I push T down? How do I reduce the threat?" Hayden says. "Do I shoot back?"

The DOD is contemplating the merits of "cross-domain" responses, says James Lewis, senior fellow at the Center for Strategic and International Studies. "We might respond with a missile. That increases the uncertainty for opponents."

Ultimately, countries that launch such attacks will pay a price, says Howard Schmidt, former cybersecurity coordinator and special assistant to the president. The U.S. response could involve economic sanctions -- or it could involve the use of military power.